In a recent blog post by CoreLogic, the real estate consultancy has determined the regions of the U.S. that have the highest correlation with the National Mortgage Fraud Risk index. The regions that are most highly correlated with fraud risk are areas that will be the best predictors of nationwide mortgage fraud. In fact, one can look at a few highly correlated regions to predict fraud risk on a national scale.

The heatmap (figure 3) shows the correlation of each region to the National Trend. Mousing over a region shows the region name, the tracking score, and the percentage level of the lowest to highest possible tracking score (-1.0 to 1.0). The heatmap has two layers (that can be toggled in the top-right menu of the map), one for state and one for CBSA. The CBSAs are limited to the top 50 CBSAs based on population.

California and Maryland have the highest correlation with the national trend for risk (see figure 2).

The two states have tracking scores of 0.49 and 0.47 respectfully. To put this in perspective, the next highest correlated state is Massachusetts with a tracking score of 0.1. All other states have a tracking score less than a 0. When California and Maryland are combined by averaging, the tracking score climbs to 0.72. The correlation typically increases the more regions that are added because the national score is a combination of all regions. However, the combined correlation gets worse when combining more states in descending order of correlation. It requires combining more than 6 states before it becomes better than combining California and Maryland alone.

Finding the states that are correlated is good but looking at smaller
regions is better. Smaller regions have a reduced number of
contributing fraud factors to analyze. Along with the states, CoreLogic also
looked at the correlation for metropolitan areas, commonly referred to
as core-based statistical areas (CBSA). Utilizing the same process, the
number of CBSAs that best fits the national trend can be reduced to
three. CBSAs are smaller than states and are less likely to be
predictive of the national trend (see figure 1).

However, combining
only three CBSAs provide a strong correlation to the National Fraud Risk
Trend. The three CBSAs are Baltimore-Columbia-Townson with a tracking
score of 0.43, San Francisco-Oakland-Heyward with a tracking score of
0.26, and San Diego-Carlsbad with a tracking score of 1.6.
Boston-Cambridge-Newton is the only other CBSA with a tracking score
higher than 0. The top 3 CBSAs combined has a tracking score of 0.64.
Combining more CBSAs will slightly increase the correlation percentage
but not significantly. There are 935 CBSAs in the Nation and the top
three most correlated CBSAs only cover 12.2 Million out of 319 Million
people (3.8%) in the US.

According to CoreLogic, the national trend is not influenced by the largest population CBSAs as one might expect, due to more fraud instances given a larger volume of mortgages. The top three CBSAs based on population (New York City, Las Angeles, and Chicago) with the highest of the three having a tracking score of -0.96 and a combined tracking score of -1.0. The same is true for CBSA’s with the highest fraud risk (Miami, Daytona Beach, and New York City), each one having a tracking score of -1.0.

Understanding the highly correlated regions helps to identify the contributing factors that lead to fraud. When looking across the nation, the number of potential factors is large and with the combination of the factors, the number becomes very large. This make it almost impossible to find the contributing factors. It is useful to see that the correlated regions are limited to just a couple of CBSA because it might reduce the number of potential factors to the point allowing analysts to identify the contributing factors.

* * *

Meanwhile, a separate analysis from Bankrate has revealed the Top 10 states for mortgage fraud: it found that Florida led the way by a large margin, with eight times the number of expected mortgage fraud investigations, according to the LexisNexis Mortgage Fraud Index. Nevada came in second, with just more than 2.5 times the number of expected investigations. Those two states showed some of the worst declines during the collapse of the housing bubble.

Florida

Nevada

Arizona

Delaware

Illinois

New Jersey

California

Michigan

Georgia

New York

The most common type of mortgage fraud involves false information on applications, according to the FBI. This category includes incorrect borrower names, lies about the borrower’s job or income, misrepresentations about debts or assets, mismatched signatures, invalid Social Security numbers, and untruths about occupancy — in other words, the borrower says the home will be a primary residence when it’s really an investment property.

A light calendar for the day unlikely to have much immediate FX impact – it that will pick up a little later on into early Europe
2245GMT – New Zealand migration figures for July. June was a record month.
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“Bannon the Barbarian” has been spending a lot of time talking to reporters since being fired by President Donald Trump on Friday. During an interview with Bloomberg, his first after being relieved of his duties as Trump’s chief strategist and returning to his former leadership role at Breitbart, Bannon claimed that he was going “to war” for Trump, and that he would marshal the resources of Breitbart, the Government Accountability Institute and the power and rage of Trump’s base against any establishment Republicans and Democrats who stand in the way of the president’s nationalist agenda.

He repeated his warnings against establishment Republicans during an interview with The Washington Post on Saturday, saying that the president’s enemies in Congress should either fall in line or risk being targeted.

“In an interview in Washington on Saturday, Bannon warned Republican leaders to enthusiastically support Trump’s priorities on taxes, trade and funding a massive border wall — or risk the wrath of the president’s base, including Breitbart, to which Bannon returned Friday as executive chairman.”

If Republicans enthusiastically support Trump’s priorities on taxes, trade and funding a massive border wall, everything will be “sweetness and light,” Bannon said. However, he doesn’t expect moderates to capitulate so easily.

“’If the Republican Party on Capitol Hill gets behind the president on his plans and not theirs, it will all be sweetness and light, be one big happy family,’ Bannon said. But Bannon added with a smile that he does not expect “sweetness” anytime soon — and described the turbulent political moment in the Republican Party and the country as a necessary battle over Trump’s priorities.”

In what sounds like an implicit threat against Gary Cohn and the other purported “globalists” in Trump’s orbit, Bannon complained that the White House has become hopelessly divided on its priorities and agenda because of the ongoing battle between Trump’s Nationalist base and Trump’s more mainstream advisers a group that includes not only Cohn but the President’s daughter Ivanka and son-in-law Jared Kushner.

“No administration in history has been so divided among itself about the direction about where it should go,” Bannon said, adding that Trump’s base is frustrated by a congressional agenda that has dovetailed more with traditional Republican priorities than the agenda Trump championed.”

Several of Bannon’s friends told WaPo that the former top strategist would probably be more effective outside the White House.

“Several friends and former co-workers said that they expect Bannon to use the platform to attack his political opponents, including those he has derided as “globalists” and Democrats inside the White House.

‘I think Steve is going to be more effective on the outside,’ said Matt Schlapp, chairman of the American Conservative Union and a longtime friend of Bannon. ‘On the outside, if you are well-funded and you are feared and you have a platform, you are going to be a power player. Steve has all of that in spades.’”

Most agreed that Bannon would probably retain at least some of his influence with the president, who has been known to call former advisers late in the evening after Chief of Staff John Kelly has left for the day.

“With Donald Trump, once he likes you, you’re either in his inner orbit, or you’re in his outer orbit,” said Christopher Ruddy, chief executive of Newsmax Media and a member of Trump’s Mar-a-Lago Club in Palm Beach, Fla. “You never leave altogether.”

“The tensions in the White House are slightly different than the tensions in the country. It’s still a divided country. Fifty percent of the people did not support President Trump. Most of those people do not support his policies in any way, shape or form,” Bannon said.

Bannon also warned that both Republicans and Democrats weren’t paying enough attention to working people around the country.

“Bannon said both Republicans and Democrats will need to pay close attention to the anxiety among many working people in the country over economic opportunity and national identity, even as they work to settle their turf fights in Washington.”

Everybody in Washington already knows that Bannon’s resources in the coming battle for the soul of the Trump presidency are nearly limitless: He has the backing of the family of billionaire Robert Mercer, an early supporter of president Trump, and his daughter, Rebekah Mercer, was an executive on the president’s transition team. Presumably, he’s telling every reporter who will listen about his war plans as a scare tactic. Bannon, who developed a reputation as an untrustworthy leaker at the White House, has never had a reputation for subtlety.

President Trump has praised Bannon publicly and congratulated his move back to Breitbart, saying “fake news” like CNN could use the competition.

Steve Bannon will be a tough and smart new voice at @BreitbartNews…maybe even better than ever before. Fake News needs the competition!

But while Chief of Staff John Kelly, Chief Economic Adviser Gary Cohn and maybe even Kushner and Ivanka Trump are probably celebrating Bannon’s departure from the West Wing, the question is, will Bannon be a bigger threat to the Trump-team globalists from outside the White House than he was on the inside?

Discussions of free speech in America are usually dominated by hypotheticals — or by slippery slope arguments, if you prefer.

The First Amendment unquestionably and broadly protects what we call “hate speech.” If you point that out, you get hypotheticals in return. “Really? So, the day that Nazis march the streets, armed, carrying the swastika flag, sieg-heiling, calling out abuse of Jews and blacks, some of their number assaulting and even killing people, you’ll still defend their right to speak?” That literal parade of horribles is invoked when free speech defenders talk about anything from bigot college kids acting out to Alt-Right racism online.

We free speech defenders are just as quick with hypotheticals; it’s built into our worldview. “Really? So you’d give the state the power to choose what speech is acceptable and what speech isn’t, and use its vast power to punish the difference? You’re comfortable giving it that power, even though some day that state might be controlled by an implacable enemy of everything you believe in, a tyrant who overtly relishes the power to punish people who think like you do, encouraged by supporters who hate you?” The unprincipled-tyrant-that-could-be is a staple of First Amendment rhetoric.

Hypotheticals – called slippery slopes when you’re dismissing them – are supposed to require some imagination, are supposed to involve some projection about how current events could deteriorate to an ugly future scenario. How will it change our thinking when that ugly future is now?

Last weekend the hypotheticals about how far the Alt-Right might go collapsed into a grim reality. Literal Nazis marched the streets of an American city, calling out Jews and blacks and gays, wielding everything from torches to clubs and shields to rifles, offering Nazi slogans and Nazi salutes. Some of their number attacked counter-protesters, and one of them murdered a counter-protester and attempted to murder many others. This is the “what if” and “how far” that critics of vigorous free speech policies pose to us as a society.

So, too, has the malevolent government we fear come to pass. We have a President elected on a platform of denouncing the press, “investigating” protest movements, and “opening up” libel laws (however little he can actually do so). We have an administration and its powerful, megaphone-equipped sycophants who define entire diverse protest groups — Black Lives Matter, as one example — by the violent actions or rhetoric of a tiny fraction of their members, and suggest that the state should treat the whole based on that part. (This, ironically, is exactly what the Nazis are now complaining that people are doing.) Rhetoric from officials and their media supporters about protest groups is full of accusations of incitement of crime and group criminality and conspiracy. Across the country, conservative legislators rush to craft statutes to protect people who run over protesters with cars. The NRA, one of the most powerful lobbying groups in the country, is putting out chillingly totalitarian propaganda videos to gun owners portraying protest against the regime as uniformly violent and criticism of the President as “inciting” that violence, and exhorting them to defend themselves and the regime from the violent protesters and their inciters. And we have a President who seems to respect no American norms.

What do we do when we near the bottom of the slippery slope?

These are hard times. Our values should be our beacons to lead us through them. Those values include due process, the rule of law and equality of all people before it, and freedom of speech and worship.

The Nazis, whether armed with rifles or clownishly clad in khakis, stand against our values – they stand for the proposition that some of us are less American than others by birth, and that America must be “preserved” to the tastes of a particular narrow ethnic prejudice. Nazis attacking and threatening our fellow Americans threaten not just their immediate targets but the foundations of everything we’ve built. Decent Americans should speak, organize, and lead against them. This is the end of another classic hypothetical — what would you do if America’s most shameful ancient wrongs were resurgent? What would you do if the Nazis started marching again?

But you cannot destroy a value in order to save it. Nazis — like terrorists — hope that we will abandon principles and fundamentally change who we are out of fear. Assault is assault, threats are threats, murder is murder, and all of them should be vigorously investigated and prosecuted. The allowance for self-defense by those threatened by Nazis should reasonably be generous. But despicable speech is protected by the First Amendment, and should remain so. Our present circumstances show why it is sheer terrified madness to entrust a broad power to prevent or punish speech upon a fickle state. We’ve flirted with that madness of abandoning rights in pursuit of safety for our nation’s whole life. The flirtation has turned sordid and degrading during the War on Crime and frankly self-destructive after 9/11. It would be philosophical suicide to hasten it now by giving a government — a visibly terrible and amoral government — the power to regulate speech.

This is the final hypothetical come to pass: if the state asked you to give up freedoms in exchange for a dubious promise it would make you safer, would you do it? Would you convince yourself that the state would only use the power against Them, and not you?

We’re a long way from perfect. But we are better than this place we find ourselves. We can climb out of it.

Nearly 130 people took part in the drill in Kotoura, which has a population of 18,000, a town official said. Reuters reports that for 10 minutes, people ducked down covering their heads with their arms. Many of those taking part said they were worried. North Korea has in the past threatened to attack Japan, a staunch U.S. ally and host to U.S. military bases.

As sirens blared from speakers in the town of Kotoura, children playing soccer outside ran to take shelter in a school, along with their parents and their team coach.

“I’ve been concerned every day that something might fall or a missile could fall in an unexpected place due to North Korea’s missile capabilities,” said the coach, Akira Hamakawa, 38.

As a reminder, Japan is the only country in the world to be attacked with nuclear weapons, and so perhaps the threats from North Korea today are a little closer to heart than for many around the world.

Following North Korean leader Kim Jong Un’s statement last week that he would “watch a little more the foolish and stupid conduct of the Yankees,” as US-South Korean military exercises begin, CNN reports that Pyongyang also declared that its army can target the United States anytime, and neither Guam, Hawaii nor the US mainland can “dodge the merciless strike.”

The messages in Rodong Sinmun, the official government newspaper, come a day before the US starts the Ulchi Freedom Guardian military exercises with South Korea.

“The Trump group’s declaration of the reckless nuclear war exercises against the DPRK … is a reckless behavior driving the situation into the uncontrollable phase of a nuclear war,” Rodong Sinmun said, using the acronym for Democratic People’s Republic of Korea, the nation’s official name.

It described North Korea as the “strongest possessor” of intercontinental ballistic missiles capable of striking the US mainland from anywhere.

“The Korean People’s Army is keeping a high alert, fully ready to contain the enemies. It will take resolute steps the moment even a slight sign of the preventive war is spotted,” it said.

China has urged both Washington and Pyongyang to tone down the rhetoric, warning via the government’s mouthpiece Global Times…

“The drill will definitely provoke Pyongyang more, and Pyongyang is expected to make a more radical response,” it said in an editorial.

“If South Korea really wants no war on the Korean Peninsula, it should try to stop this military exercise.”

Kim’s threats come after both US Secretary of State Rex Tillerson and Secretary of Defense James Mattis said last week that the US was keeping military options on the table in dealing with North Korea.

Back in July, Fox News columnist, Steve Kurtz, asked the question regarding the 25th amendment: Constitution or Coup? But that wasn’t the first time the 25th amendment was mentioned by democrats. They’ve b…

The solar eclipse will significantly diminish solar capacity for a couple of hours, prompting the solar industry to set up a complex back-up system of other power sources, Vox reports.The post Solar eclipse 2017: How the solar power industry is preppin…

Eugéne Etsebeth is an ex-central banker who was employed as a technologist at the South African Reserve Bank from 2013 to 2017. During his time at the reserve bank, he notably chaired the virtual currency and distributed ledger working group.

In this opinion piece, Etsebeth outlines why he believes central banks won’t be able to adapt to innovations in cryptocurrency, arguing they simply aren’t set up to compete with sea changes in technology.

It’s a familiar trend, one that happened in communications (internet), and that is now playing out in energy (solar), manufacturing (3D printing) and finance (cryptocurrency) – power and control are moving into the hands of the individual and away from nation states.

This has huge implications for central banks, which today enable nation states to maintain their monopolies over the issuance of notes, coins and sovereign bonds. While communications and manufacturing are not their focus, cryptocurrencies and initial coin offerings (ICOs) fall predominantly in the realm of central banks.

In these systems, central banks don’t issue legal tender. Rather, miners and algorithms now control the issuance of tokens – effectively, the money supply. Whereas previously banks were licensed to store, send and spend currency, now wallet providers and exchanges allow the same features.

The currency renaissance has arrived and central banks are studying cryptocurrencies, though some central banks are more open to change than others.

Singapore has been investigating the notion of using distributed ledger technologies to settle cross-border transactions in real time, and the Bank of England has experimented with Ripple. Central banks are even looking to build their own versions of central bank-issued digital currency (CBDC).

Even still, central banks are not well equipped to deal with the cryptocurrency renaissance.

In fact, there are 10 good reasons why most central banks will find cryptocurrencies insurmountable. Sure, a small number of forward-thinking (and acting) central banks will maintain monetary competiveness with the burgeoning cryptocurrencies and ICOs that have reared their decentralized heads.

Still, most will succumb to a mix of the following issues:

1. Workforce of the past

Central banks will need to attract and retain fresh talent that will enable them to deal with the new openness and transparency demands, as well as digital transformation and the increasingly complex global world.

2. Slow decision-making

Decision-making in central banks is like wading through treacle – decisions take months because of numerous layers of hierarchy.

Working groups need to compile voluminous and detailed documents that need to be reviewed and signed by all parties before they can proceed to the heads of departments or the deputy governors.

3. Too few technologists and innovators

Academics, economists and big-picture thinkers excel in central banks. The academics ponder on conceptual issues and the economists make interpretations from data, whereas the policy makers and regulators mull over the cause and effect of promulgating laws.

However, technologists are generally not part of the discussion when it comes to policy and economic decisions for currency.

4. Fear of experimentation

Although some central banks are engaging in experimentation, there is a fear of going from proof-of-concept to pilot phase.

This is natural, should a central bank make an error, it may turn out to be a reputation buster – and reputation is the cornerstone of central banks. There is also some trepidation that the early regulation of cryptocurrencies, and associated new technologies, may legitimize their adoption.

5. Territorial and siloed thinking

Central banks are similar to conglomerates in that they have a number of different and distinct departments that require diverse skills and outputs.

These differences make it difficult to approach a new technology and economic tour de force like cryptocurrency, because it doesn’t fit neatly into any one of the industrial-style conglomerate domains.

To highlight the conglomerate type nature of central banks, the core departments and skill sets are listed below:

National payments: a combination of regulators for payments and technical resources running the RTGS system

Research: mainly economists who produce statistics based reports and input into repo-rate decisions.

6. Buy versus build approach

Most central banks do not have substantial software development capability. Therefore any new project will have to buy its technology. There is an acute shortage of central bankers who can explain or use Merkle trees.

7. Stuck in the status quo

A large portion of central bankers are career central bankers, so the desire and ability to change are not incentivised. Change is often considered a threat to staff, and threats are met with jelly-like stickiness to the status quo.

8. Incumbent relationships

Banks are licensed to operate by central banks, giving them the ability to create money from customer deposits.

The central bank asks the banks to protect depositor’s hard-earned money and to serve as many customers as it can: i.e. maximizing financial inclusion. The task of banks is therefore to service a nation’s citizens at the behest of the central bank.

These relationships and licenses are expensive to buy and will not easily be changed to include new members.

9. Inter-governmental coordination

Just as the departments within central banks tend to be siloed, so too are the intergovernmental departments that look at currency matters.

They cover treasury, financial intelligence (KYC), financial services conduct authority, central bank, tax revenue and secret service units. Each of these units may have different acts and regulations that overlap cryptocurrencies and ICOs.

10. International coordination

Internationally the nation-state must get guidance from a multitude of organisations like the G20 or G7, International Monetary Fund (IMF), Bank of International Settlements (BIS), Financial Action Task Force (FATF) and INTERPOL. International coordination often requires prolonged diplomacy and mismatched agendas.